The National Farmers’ Union (NFU) has become concerned by reports from its membership that The Co-operative Group has begun using unreasonable tactics in its dealings with suppliers.
The union has been contacted by suppliers of fresh produce which complain that the retailer has asked for “guaranteed 50 per cent margins” and extended payment terms, effectively changing trading terms. These requests have been made since the group expanded with the acquisition of Somerfield in March.
The source at the NFU said it was the first time the union had heard criticism of this nature levelled at The Co-operative Group. The source said: “It appears that examples of the type of behaviour we have witnessed elsewhere among the multiples in the UK, but have not heard of at The Co-op, are now starting to happen there too. We do get information quite often from suppliers to all the major players, but this is extremely surprising given the ethical stance The Co-op usually takes. I would say the information has really started coming over the summer. It could be the result of the acquisition and a feeling that now The Co-op has joined the big time, it can flex its muscle a bit.”
The Co-operative Group has strenuously defended its position. A spokesman told freshinfo: “We operate in a highly competitive marketplace and the terms on which we negotiate with our suppliers are confidential. When putting our business out to tender, we are seeking to achieve long-term relationships with suppliers... It is in neither party’s interest to commit to terms which are unsustainable, nor is it in our long-term interests to force unreasonable terms on suppliers which will lead to a reduction in our supply base.”
However, the feeling at the NFU is that this latest action makes the introduction of the supermarket ombudsman all the more urgent.
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